Oil traded near $50 a barrel as U.S. drilling slowed before OPEC delegates meet in Vienna to discuss production policy.
Futures were little changed in New York after climbing as much as 0.8 percent earlier. Rigs targeting crude in the U.S. slid by 2 to 316 through May 27 after no change the previous week, Baker Hughes Inc. said Friday. The Organization of Petroleum Exporting Countries will discuss issues including an output freeze when the group gathers June 2, said Iraq’s Deputy Oil Minister Fayyad Al-Nima, who will head his ministry’s delegation to the meeting.
Oil has surged almost 90 percent since slumping to a 12-year low in February on signs the worldwide surplus is easing amid declining production from the U.S. to Nigeria. OPEC is unlikely to reach any agreement to limit output when it meets Thursday as the group sticks with Saudi Arabia’s strategy of squeezing out rivals, according to analysts surveyed by Bloomberg.
“The Saudi strategy is clear and it seems there is less incentive for OPEC to do anything given the policy they have in place is starting to work,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “Significant price gains from here would be a real indication of confidence.”
West Texas Intermediate for July delivery was at $49.29 a barrel on the New York Mercantile Exchange, down 4 cents, at 12:10 p.m. Hong Kong time. The contract fell 15 cents to close at $49.33 on Friday. Total volume traded was about 56 percent below the 100-day average.
Brent for July settlement was 14 cents lower at $49.18 a barrel on the London-based ICE Futures Europe exchange. The contract lost 27 cents to $49.32 on Friday. The global benchmark was at a discount of 10 cents to WTI.